MacNaughton not sweating over Trump's trade talk

Canada’s ambassador to the U.S. David MacNaughton is downplaying any cross-border tension with the United States over dairy tariffs, calling the relationship “terrific” and “a model for the rest of the world.”

His remarks follow sharp criticism from U.S. President Donald Trump over Canada’s supply-managed dairy industry, suggesting the rules are stacked in Canada’s favour.

Trump said U.S. farmers are being subjected to “another typical one-sided deal against the United States” and vowed to drive a hard bargain in pending trade talks during an event at a Kenosha, Wis. tool factory on Tuesday.

MacNaughton first responded soon after Trump’s remarks, sending a letter to the governors of Wisconsin and New York, both U.S. dairy strongholds, saying “the facts do not bear out” the U.S. president’s criticism of Canada.

The ambassador told reporters in Halifax on Wednesday that earlier written appeals from New York Governor Andrew Cuomo and Wisconsin Governor Scott Walker to the White House demanding action on the dairy file contained “factual errors” and noted the purpose of his strongly-worded response was to “set the record straight.”

U.S. farmers have claimed they are losing up the US$150 million per year because of heavy import tariffs on ultra-filtered milk used to produce cheese.

However, Francois Dumontier, a spokesman for Les Producteurs de lait du Quebec, said imports of U.S. milk products have increased since 1993, and now account for three-quarters of milk products in Canada.

"So the Americans are not suffering from the current terms of NAFTA and existing trade agreements," said Dumontier.

“There are a lot of time when it is easier to blame somebody else then it is to deal with the market situation,” MacNaughton said of Cuomo and Walker.

Despite the dust-up over dairy, MacNaughton struck an upbeat tone while discussing Canada-U.S. trade with reporters in Halifax on Wednesday.

“The relationship with the United States on trade is extremely strong,” he said. “We have developed a good relationship with the new administration,” he said.

MacNaughton touted the more than $2 billion in trade that flows both ways across the border every day, adding that he does not expect issues with any single commodity to irreparably damage historically robust trade ties.

“There are irritants. There are always going to be irritants. We’ve had a tough time on softwood lumber for 30 years,” he said. “I think it's going to work out just fine.”

Quebec Premier Philippe Couillard also took a stand against Trump’s latest salvo on international trade, saying he will stand up for family farms in his province and to “defend the right of young people to choose a rural way of life in agriculture.”

He added that the U.S. “heavily subsidizes” their agricultural sector.

The U.S. president’s tough talk on trade was coupled with the signing of a “Buy American-Hire American” executive order designed to bolster protectionist U.S. procurement policies and limit the number of foreign workers coming into the country.

The surprise tongue-lashing represents some of the new administration strongest anti-Canada rhetoric thus far, and a significant departure from the relatively warm reception Prime Minister Justin Trudeau received on his first meeting with Trump in the U.S. capitol.

It also harkens back to the U.S. election campaign trail, when Trump regularly lashed out at specific industries, and even individual companies, and decried NAFTA as one of the worst deals ever made.

“NAFTA has been very, very bad for our country. It’s been very, very bad for our companies and for our workers and we’re going to make some very big changes,” Trump warned in his remarks on Tuesday. “Or we’re going to get rid of NAFTA for once and for all. We cannot continue like this, believe me.”

MacNaughton said the dairy dispute could be far in the rear-view mirror by the time any potential negotiations on the long-standing trilateral trade agreement get underway.

“Obviously there is an election in Mexico next year which I think is hanging over all of this. The (U.S.) secretary of commerce hasn’t been able to get the negotiating authority yet. They haven’t been able to get the 90-days’ notice to congress. That will dictate how quickly negotiations go,” said.

That leaves plenty of time for Trump to adopt MacNaughton’s “glass is half full” outlook on Canada-U.S. trade.

“Americans are starting to realize more and more that Canada is pretty important to jobs in the U.S.,” he said. “I think that you would have to say the Canada-U.S. trading relationship is a model for the rest of the world.”